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Kernel Capital launch €10M Bank of Ireland MedTech Accelerator Fund

Thursday, 3 February 2011

Kernel Capital to manage 'Bank of Ireland MedTech Accelerator Fund'
established with co-investors:
NUI Galway, Enterprise Ireland & University of Limerick Foundation

CORK Ireland, 03 February 2011: Kernel Capital today launched the €10M Bank of Ireland MedTech Accelerator Fund, Ireland’s first Seed Fund to focus exclusively on the indigenous medical technology sector. With investments ranging from €100,000 to €500,000, the Fund is focussed on export orientated high potential start-up Life Sciences companies that operate in the medical device, diagnostics or medical/laboratory sectors.

The Fund will operate synergistically with the Information Communications and Technology focussed Bank of Ireland Seed and Early Stage Equity Fund also managed by Kernel Capital as well as with the Seroba Kernel Life Sciences Fund that typically invests in the €2m to €5m range in later stage projects. The launch of this Fund marks the introduction of ‘NUI Galway’ as an investor with Kernel Capital. NUI Galway joins its strategic alliance partner the University of Limerick, Bank of Ireland and Enterprise Ireland in supporting this unique initiative for early stage Medical Technology companies.

As one of the top performing sectors in the Irish economy, medical technology directly employs more than 24,000 people and generated €6.8bn in exports in 2009. Nine of the world’s top ten medical technology companies have invested significantly in Ireland. The medical technology market is estimated to be worth circa US$300bn worldwide and the west of Ireland in particular is noted globally as a centre of excellence in the creation of innovative research based companies and indigenous medical device start ups. This new Fund creates greater access to investment enabling early stage companies to capitalise on the sectors potential.

Commenting on the announcement, Donal Duffy, Head of Enterprise Ireland Relations, Bank of Ireland said: “Bank of Ireland recognises the importance of supporting start-up businesses across emerging sectors including medical technology. The launch today of the Bank of Ireland MedTech Accelerator Fund with our strategic partner Kernel Capital further demonstrates our commitment to this key growth area and our continuing support for domestic export orientated businesses in Ireland. We are delighted to be a key investment partner in this Fund and welcome the involvement of NUI Galway and University of Limerick and the valuable research work conducted in both Universities to support these emerging sectors."

“Enterprise Ireland sees the medical devices and related areas as offering very strong potential for innovative, export focussed start up companies. This new Fund is very welcome, marking an important increase in the availability of capital to support the commercialisation of new and innovative products from ambitious Irish companies,” said Seamus Bree, West Region Director, Enterprise Ireland.

Dr. James J. Browne, President of National University of Ireland Galway, said: “Through its research activities, NUI Galway continues to play an important role in the development of the medical technologies sector in Ireland, so it is particularly appropriate that we are involved in this new initiative. We are delighted to invest with Kernel Capital and join with the University of Limerick in supporting the Bank of Ireland MedTech Accelerator Fund. This Fund will enable new companies to gain access to the seed funding necessary to bring their innovations to the product development stage".

Professor Don Barry, President of the University of Limerick, added: “Today's announcement reflects the University of Limerick’s commitment to working with Irish industry and reinforces the UL-NUI Galway Strategic Alliance. This Fund will play a key role in helping start-up and emerging companies to access early stage capital to grow, create jobs and commercialise new innovations.”

Niall Olden, Managing Partner of Kernel Capital said: “We are very pleased to confirm the NUI Galway as our new partner joining Bank of Ireland, Enterprise Ireland and University of Limerick Foundation continuing to invest in our new Fund initiatives. It is excellent timing, Ireland boasts Europe’s leading cluster of MedTech industries and there is considerable untapped potential for new enterprise creation; Irish start-up companies are ideally placed to pioneer the next generation of global healthcare devices. The Fund will operate synergistically with Seroba Kernel our Life Science associate firm which is focussed on larger Life Science deals and which has the ability to provide significant follow on finance to appropriate investments.”

ENDS

For further information please contact:
Orla Rimmington, Operations Director, Kernel Capital.
Tel: +353 21 4928974 / Fax: +353 21 4928977

Notes to Editors:

Bank of Ireland MedTech Accelerator Fund
The Bank of Ireland MedTech Accelerator Fund is a parallel Fund of the Bank of Ireland Seed and Early Stage Equity Fund. This new Fund has been enabled through the additional investment in January 2011 of €5m by Bank of Ireland and €1m by NUI Galway in the existing Bank of Ireland Seed and Early Stage Fund raising this Fund to €32m. This Fund has now allocated €10m for early stage MedTech investments and the remaining €22m for early stage Information Communications and Technolgy investments.

About Kernel Capital
Kernel Capital and its associate Life Science investment firm Seroba Kernel have in excess of €196m under management in six separate Venture Capital funds, investing in ICT, Life Science and general seed and early stage investments. These funds are supported by Enterprise Ireland, Bank of Ireland, University of Limerick Foundation, NUI, Galway and a range of other financial institutions. They have invested in Kernel Capital's portfolio of 43 companies which collectively employ in excess of 800 people and have been granted 150 scientific patents. Kernel Capital and Seroba Kernel are committed to dynamic, innovative, knowledge based companies and led in excess of €96m in syndicated investment in 2010. Kernel Capital believe that it is an exceptional time for investment and will close a number of transactions in 2011.

About the Irish Medical Technology Sector
• There are currently over 160 medical technology companies in Ireland, exporting €6.8bn worth of product annually (2009) and employing 24,000 people - the highest number of people working in the industry in any country in Europe, per head of population.

• Exports from Ireland in 2009 were 9% higher that 2008 (full 2010 analysed figures not available as yet).

• A recent Irish Medical Device Association survey found that 40% of companies intend hiring additional staff in 2011. 55% rated confidence in their own business as either very good or good. Over 60% projected increased sales in the next three months.

• 15 of the top 25 global med tech company located in Ireland (Source: IDA).

• Over 90 of the companies in the sector are indigenous (Source: Enterprise Ireland).

• The Irish government has identified the medical technology sector as one of the key drivers of industrial growth for the future and provides a wide range of supports to encourage and foster this growth.

• The medical technology industry in Ireland is changing from being prominently manufacturing to being more complex and driven by R&D. It now involves intensive collaboration between a broad range of partners, including research institutions, clinicians, manufacturing companies and government agencies.

Source: Irish Medical Device Association http://www.imda.ie/
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